Indian software service vendors turn to Japan to expand business

By siliconindia staff writer   |   Friday, 28 November 2003, 08:00 Hrs
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BANGALORE: With Japan slowly emerging out of economic recession, Indian software service vendors anticipate more business from this market which spends substantial amounts on information technology.

As outsourcing and offshoring have become more prevalent across the globe, software vendors hope that Japan will be more supportive to third-party software services providers. Restricted IT budgets and pressure to reduce cost will push Japanese companies to buy IT services from Indian vendors, predict executives of software service firms.

The software services market in Japan is expected to be around $78 billion in 2005 said software services vendors. Indian software companies like Wipro and rival Infosys have had limited success in the Japanese market. Wipro’s earnings from this market is minimal, despite operating in Japan from the past eight years. Wipro’s earnings from Japan was 4% of its first half earnings of Rs 2,574 crore made this fiscal.

Likewise, Infosys too has not made much progress. Infosys’ revenue from the Asia Pacific region (including Japan ) is 6.1% of its total first half current fiscal revenues of Rs 2,217 crore. It was 6.9% of last fiscal’s first half revenue of Rs 1,644 crore.

Infosys holds 12.5% stake in JASDIC Park Company of Japan, which was set up to facilitate and interface for business relations between India software companies and Japanese customers.

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